March 21,2007

Floor Statement of Senator Max Baucus Regarding the CHIP and Tax Cut Budget Amendment

Floor Statement of Senator Max Baucus (D-Mont.)
Regarding the CHIP and Tax Cut Budget Amendment

Mr. President, I commend the Chairman of the Budget Committee for his able work in
bringing this budget to the Senate. He has done good work.

But the budget resolution before us leaves a surplus of $132 billion in 2012. The amendment that I now offer on behalf of Senators Landrieu, Pryor, Bayh, and Bill Nelson
would state the Senate's will on what we should do if that surplus materializes. In sum,
our amendment says that the Senate's highest priority for any surplus should be American

Our amendment would put children first. It would take $15 billion and devote it to
improving children's health care coverage under CHIP. Now the budget resolution already recognizes this priority in a deficit neutral reserve fund. Our amendment would also reduce the amount in that reserve fund. So we are not increasing the net amount of spending on CHIP.

We are just making that work on CHIP more likely. We are saying that if we have a
surplus in 2012, then we ought to spend some part of that surplus on children’s health.

And we are saying that if we have a surplus in 2012, we should not raise taxes to pay for
all of CHIP. If we have a surplus in 2012, we should not cut Medicare to pay for all of
CHIP. Rather, we should use some of that surplus to fund children’s health. We should
put children first.

Then our amendment takes the rest of the surplus and returns it to the hardworking
American families who created it. Our amendment devotes the rest of the surplus to the
extension and enhancement of tax relief for hardworking American families.

Here are the types of tax relief that we’re talking about. We’re talking about making the
ten percent tax bracket permanent. That’s a tax cut for all taxpayers.

We’re talking about extending the child tax credit. That provides a $1,000 tax credit per
child. This tax credit recognizes that a families’ ability to pay taxes decreases as family
size increases. Unless we act, the child tax credit will fall to $500 per child. The child
tax credit should be made permanent. We need to recognize the financial responsibilities
of child rearing.

We’re talking about continuing marriage penalty relief. Marriage penalty relief is a tax
cut on which the American family has come to rely. Marriage penalty relief makes sure
that a married couple filing a joint return has the same combined tax liability as they
would have if they were not married.

We’re talking about enhancing the dependent care credit. This credit is very important to
working families. It recognizes the additional cost for raising children in this fast-paced

We’re talking about improving the adoption credit. The majority of adoptions cost over
$20,000. This provision offers a credit of $10,000 for those willing to give a home to a
needy child.

We’re talking about providing combat pay EITC. Under current law, income earned by a
soldier in a combat zone is exempt from income tax. This actually hurts low-income
military personnel under the EITC. If not for the EITC Combat pay exception, combat
zone pay would not count as earned income for purposes of determining the credit. This
amendment makes that exception permanent so that military families can get the full
benefit of EITC.

We’re talking about reforming the estate tax. We want to try to give American families
certainty. We want to support America’s small farms and ranches. With this amendment, we have allowed room for an estate tax reform that will do just that.

And we’re talking about returning surplus revenues to hardworking American families.

That’s what our amendment does. It’s a pretty straightforward amendment. It says that
we should put America’s kids and families first. I urge my Colleagues to join me in
supporting this amendment.